Building Energy Simulation Software Market Size, Share, and Industry Analysis, By Deployment (On-Premises and Cloud-Based), By Enterprise Size (Small and Medium Enterprises and Large Enterprises) By Application (Commercial Buildings, Residential Buildings, and Others), By Industry (Architecture and Construction, Manufacturing and Engineering, Government and Defense, and Others) and Regional Forecast till 2032

The global building energy simulation software market is growing considerably due to the increasing acceptance of environmentally friendly buildings globally, motivated by the desire for sustainability. This software plays a vital role in the architecture and construction industries, working alongside building information modeling (BIM) tools to improve energy management and analysis procedures. These specific programs use algorithms and input data to simulate building energy performance, considering factors, such as design, materials, HVAC systems, and environmental conditions. The software allows architects, engineers, researchers, and contractors to forecast and assess energy usage throughout various phases of a building's lifespan, spanning from initial design to renovation endeavors.

Impact of Generative AI on the Building Energy Simulation Software Market

Generative AI is poised to transform the building energy simulation software sector by greatly improving optimization, efficiency, and innovation. Generative AI uses extensive datasets to generate precise and dynamic simulations, allowing buildings to adjust to varying conditions intelligently. This development boosts energy efficiency, lowers operational expenses, and elevates overall effectiveness. Some of the revolutionary impacts of generative AI in building energy simulation include improved predictive maintenance, sophisticated energy modeling, and enhanced resource utilization benefits. For instance,

• In 2024, Honeywell collaborated with Cisco to develop an AI-driven system that adjusts building systems according to changing usage levels to lower energy usage and enhance worker productivity and comfort.

Building Energy Simulation Software Market Driver

Growing Adoption of Green Buildings is the Key Factor Driving Global Market Growth

The increased focus on environmental sustainability has greatly sped up the implementation of green buildings in the last ten years. With a growing understanding of the environmental effects of construction, an increasing number of projects are adopting eco-friendly building methods, which aim to lower energy and water consumption by utilizing creative design, eco-friendly materials, and renewable technologies. This shift reflects a broader societal trend toward prioritizing a sustainable living environment. For instance,

• In 2024, the U.S. Green Building Council (USGBC) announced that more than 46,000 residential projects have been certified under the LEED green building rating system. There is an increase of 5% in LEED residential registration as compared to 2023.

Building Energy Simulation Software Market Restraint

High Cost of Implementation Hampers Market Growth

One major obstacle in the construction energy simulation software sector is the expensive implementation costs. This encompasses not just the software's starting cost but also the costs linked to its setup, customization, and incorporation into current systems. Moreover, there are continual expenses for upkeep, upgrades, and tech assistance. For numerous small and medium-sized enterprises (SMEs), these expenses may be too high, restricting their capacity to integrate such sophisticated tools. Large companies may also face high financial costs, so they need to allocate and justify their budget carefully.

Building Energy Simulation Software Market Opportunity

Increasing Awareness of Carbon Emissions Creates Opportunity in the Market

The continued emphasis on lowering carbon emissions within the construction industry is driving a significant rise in the need for advanced energy simulation software. Governments, businesses, and communities are working toward ambitious climate targets, highlighting the increasing importance of tools for accurately modeling and optimizing energy consumption. The increasing financial backing and policy efforts designed to speed up the advancement of sustainable technologies further strengthen this requirement. For instance,

• BTO (U.S. Department of Energy’s Building Technologies Office) announced a funding opportunity in 2023 called BENEFIT 2024, offering up to USD 30 million for innovations that show, improve, and support the decarbonization of building systems.

Segmentation

Key Insights

The report covers the following key insights:

• Micro Macro Economic Indicators
• Drivers, Restraints, Trends, and Opportunities
• Business Strategies Adopted by the Key Players
• Impact of Generative AI on the Global Building Energy Simulation Software Market
• Consolidated SWOT Analysis of Key Players

Analysis by Deployment

By deployment, the market is divided into on-premises and cloud-based. The global market for building energy simulation software was primarily driven by the cloud-based segment in 2023 as they are easy to access, versatile, able to grow with demand, affordable, and regularly updated, which makes them perfect for remote work and dispersed teams. For instance,

• Autodesk introduced Autodesk Forma, an industry-specific cloud platform designed to streamline processes for design, construction, and operation teams. Its primary aspects are centered around the beginning stages of planning and design. It utilizes automation and AI to simplify concept exploration, minimize repetitive tasks, and evaluate environmental attributes, enabling architects to focus on innovative resolutions.

Analysis by Enterprise Size

The market for building energy simulation software is divided by company size into small and medium-sized enterprises (SMEs) and large enterprises, with large enterprises dominating the market. Several crucial factors are responsible for this domination. Large companies usually have more money to spend, which enables them to purchase sophisticated and costly simulation tools for precise energy performance evaluations. They are also responsible for managing more intricate and larger projects that demand advanced software for maximum efficiency and energy conservation. Moreover, large corporations are at a higher risk of encountering strict regulatory demands, which means they need to utilize detailed energy simulation software to adhere to energy efficiency, sustainability, and environmental impact guidelines. Moreover, big corporations possess the necessary resources to properly train specialized staff and seamlessly incorporate these tools into their processes, optimizing their capabilities.

Analysis by Application

The market for building energy simulation software is divided by application into commercial buildings and residential buildings, with commercial buildings dominating the market. This is mainly due to commercial buildings using more energy and are more complex, so they require advanced simulation tools to improve energy efficiency. Furthermore, commercial buildings frequently face more stringent regulatory mandates and sustainability objectives, which leads to a growing need for advanced simulation software. In commercial projects, bigger budgets and resources make it easier to adopt these tools, leading to their higher prevalence in the commercial sector compared to residential buildings.

Analysis by Industry

By industry, the market is divided into architecture and construction, manufacturing and engineering, government and defense, and others. The architecture and construction sector has the greatest market share in the building energy simulation software market. The high demand for energy efficiency and sustainability within the industry is the driving force behind this dominance, requiring the use of advanced simulation tools to optimize building designs and operations. Furthermore, strict building codes and regulations focused on lowering energy usage and carbon emissions intensify the demand for thorough simulation software. This trend is also reflected in emerging markets where collaborations are being formed to further these goals. For instance,

• In 2024, the Confederation of Real Estate Developers’ Associations of India (CREDAI) partnered with the Alliance for an Energy-Efficient Economy (AEEE) to support the development of net-zero buildings in India by sharing knowledge and building capacity.

Regional Analysis

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In terms of geography, the global market is segmented into North America, Europe, Asia Pacific, South America, and the Middle East & Africa.

North America held the highest market for building energy simulation software in 2023. The strong position is influenced by a rising emphasis on eco-friendly construction and a greater focus on enhancing energy efficiency in residential, commercial, and industrial areas. For instance,

• In 2024, The Biden-Harris Administration revealed a plan to provide more than USD 240 million for fresh and creative codes to help consumers save money and lessen the effects of climate change.

Europe held the second-largest market share for building energy simulation software in 2023. This growth is largely driven by the widespread adoption of sustainable building practices and stringent regulations aimed at improving energy efficiency. For instance,

• In 2024, the European Union published a comprehensive revision of its Energy Performance of Building Directive (EPDB), establishing specific requirements and targets for the energy efficiency and intelligence of buildings across the European nations.

Asia Pacific is growing at a significant rate in building energy simulation software. This growth is driven by rapid urbanization and increased construction of advanced commercial buildings, along with the implementation of new regulations aimed at reducing carbon emissions. For instance,

• In 2022, China’s Ministry of Housing and urban-rural development introduced the general code for building energy conservation and renewable energy utilization. This regulation mandates carbon emission reduction across various building-related aspects, including existing and new buildings, construction processes, renewable energy systems, and building operations.

Key Players Covered

The global building energy simulation software market is fragmented, with the presence of a large number of groups and standalone providers. In the U.S., the top 5 players account for only around 23% of the market.

The report includes the profiles of the following key players:

• ABB (Switzerland)
• Autodesk (U.S.)
• Bentley Systems (U.S.)
• Cisco Systems (U.S.)
• Emerson Electric Co (U.S.)
• Honeywell International Inc (U.S.)
• IBM (U.S.)
• Spacewell Energy (Spain)
• Siemens (Germany)

Key Industry Developments

• In 2024, ABB and Cleanwatts signed a memorandum of understanding to develop advanced energy management technologies for communities and buildings. The collaboration will focus on creating scalable projects in key European markets, aiming to improve energy efficiency and sustainability through smart monitoring and control solutions.
• In 2024, Capgemini and Schneider Electric joined forces to assist businesses in reaching energy optimization goals. It is created to assist organizations in speeding up their progress toward more intelligent and environmentally friendly facility management and energy efficiency.